Shares of semiconductor manufacturer Nvidia a supplier of chips for everything from playing video games to performing artificial intelligence tasks to mining cryptocurrency, dropped 2.2% through 10 a.m. EDT Friday. It's the last of those three chip uses -- mining cryptocurrency -- that seems to be weighing on the stock.
The People's Bank of China, you see, just announced that it is banning all cryptocurrency transactions in the country, and in particular, banning Bitcoin and Tether from circulating in China.
The move seems likely to weigh on Nvidia's business, but I wouldn't be too concerned for Nvidia stock despite the drop.
Consider: In its first-quarter earnings report earlier this year, Nvidia advised investors that a new line of semiconductors it had developed specifically for crypto mining generated $155 million in incremental revenue. Expand that out, and specific cryptocurrency-related revenue for the company may be as much as $620 million a year.
Now, that sounds like a lot, but as a percentage of Nvidia's $21.9 billion semiconductors business, it really amounts to just 2.7% of total revenue -- and even then, most of this revenue from sales to countries other than China should be unaffected by China's move.
Overall, I’m bullish on NVDA without question.
When we take a look at the daily & weekly chart you can see price has broken out of its ascending triangle to the upside and has also retested to see if it would act as support.
You have the MACD looking strong
& RSI sitting above 50.
Without question, this should be on your watchlist this week.
- Factor Four
The People's Bank of China, you see, just announced that it is banning all cryptocurrency transactions in the country, and in particular, banning Bitcoin and Tether from circulating in China.
The move seems likely to weigh on Nvidia's business, but I wouldn't be too concerned for Nvidia stock despite the drop.
Consider: In its first-quarter earnings report earlier this year, Nvidia advised investors that a new line of semiconductors it had developed specifically for crypto mining generated $155 million in incremental revenue. Expand that out, and specific cryptocurrency-related revenue for the company may be as much as $620 million a year.
Now, that sounds like a lot, but as a percentage of Nvidia's $21.9 billion semiconductors business, it really amounts to just 2.7% of total revenue -- and even then, most of this revenue from sales to countries other than China should be unaffected by China's move.
Overall, I’m bullish on NVDA without question.
When we take a look at the daily & weekly chart you can see price has broken out of its ascending triangle to the upside and has also retested to see if it would act as support.
You have the MACD looking strong
& RSI sitting above 50.
Without question, this should be on your watchlist this week.
- Factor Four